Distribution Sets in as the Dollar Rallies

Just another day in stock market land where stocks staged an intraday reversal as the US Dollar rallies.  Volume rose across the board, but only slightly higher than Wednesday and still well below average.  On the NASDAQ Three Come Corp provided the day with volume skewing the days results.  At any rate, the market flashed a distribution day after the S&P 500 stalled at a new high.  Thursday was just another sign this market is one that should be approached with extreme caution.  This current rally now has a 50/50 chance of succeeding due to the distribution and stalling.  Just another reason why we continue to stay disciplined and not overextended.

Some of the leadership we have seen over the past few weeks are holding up at the moment.  Many of these stocks are holding up with very little volume on the downside.  The Big Wave Trading chat room participants know the stocks I am referring to know these are still holding up.  With that said, leadership is narrowing a bit and that is never a sign we want to see.  This market has done its best to confuse and outwit those who are participating.  It is why we must take it stock by stock and stay methodical in our approach.

Now isn’t the time to be plunging in the market, without a clear edge plunging will only force you to churn your account into oblivion.  From the 1938 highs to the 1942 lows which took out the ’37 lows there were plenty of counter trend rallies.  If you were to mimic that market and you attempting to plunge you would churn yourself and miss a dandy of a rally in 1945.  The point here, there isn’t a real edge to this market and we must be nimble.

Best of luck and enjoy your weekend